Billions in IT funding makes little impact

Just how backward the Greek state is in terms of information and telecommunications technology was outlined by the leadership of the Ministry of Administrative Reform and e-Governance in a recent bombshell press conference, where Deputy Minister Pantelis Tzortzakis described how Greece has spent 7 billion euros on updating information and communications systems since 1996 yet remains the European Union laggard in most indices set by the European Commission?s strategic Digital Agenda 2020 Framework Program.

?We have spent 7-8 billion euros on telecoms and data processing since 1996 and the result is that not only are we nowhere near the European average, but we are the last or second to last, case by case, in Europe,? Tzortzakis told the press last week, adding that Greece?s performance has actually dragged the EU average down.

According to the most recent assessment of the country?s performance within the framework of the Digital Agenda 2020 initiative, the country is at the bottom of the rankings in 55 of the 67 indices used to evaluate the proliferation of data processing and telecoms technology, while it comes close to the EU average in only 12 indices. The only area in which Greece?s record is not abysmal is the percentage of the population that has access to broadband telecoms technology, according to the Commission, though as Tzortzakis noted, this is not thanks to the state?s initiative but to that of private companies.

?Without IT, which allows us to cross-reference data, we will never be able to catch up with tax evasion. We don?t need to take aerial photographs to find the swimming pools if we know that water consumption is through the roof,? he said of one of the indicators used to track down tax dodgers.

The deputy minister put the failure to absorb IT as an administrative tool down to the constant changes in personnel in the public administration and to the lack of an overall strategy to this end.

?There has never been any continuity not just from one government to the next, but even within the term of a single administration,? he said.

Tzortzakis was speaking at the Administrative Reform Ministry?s unveiling of a new strategic plan to correct a number of past mistakes. Minister Dimitris Reppas conceded that the plan comes just a month before general elections are expected to take place and as such could follow the fate of other similar initiatives, but he did stress that once launched, it should be adhered to.

?After the elections Greece must have something to build on; it mustn?t start in virgin territory,? Reppas said.

Tzortzakis, meanwhile, explained that all the parties in Parliament have been briefed on the content of the proposal. ?The proposal has been at the disposal of representatives for all the parties for a month. Amendments have been made to the text and we have taken a lot of different arguments into consideration,? he said.

According to the proposal, Greece will commit to achieving all of the targets of the Commission?s Digital Agenda by 2020, as well as the midterm targets outlined for 2015. These include, for example, increasing the percentage of the population that regularly uses the Internet for online transactions with the public administration and the number of broadband connections. Greece?s progress will be assessed on an annual basis by the European Commission.

Public payroll

A unified pay structure in the public service is a project that has been knocking around since the mid-1990s, and while it is currently in the pipeline, it has yet to be put into effect.

The aim of the project was to create a centralized payroll system for civil servants and it received funding from the Second Community Support Framework. Back then, it had a budget of 80 million drachmas (240,000 euros; a significant amount at the time) and as most private companies had already introduced their own computerized payroll programs, the funding could have been used for the civil service only.

A competition for the project was launched at the time, but it only covered the Finance Ministry, leaving all the other ministries doing things the old-fashioned way. According to sources close to the project at the time, all the other ministries refused to be included in the digital upgrade because they did not want rival ministries to know what they were paying under their jurisdiction and to whom.

The unified pay structure came back onto the agenda on the demand of the country?s creditors in 2010 as it constituted one of the terms of Greece?s first bailout deal. The unified pay structure and the so-called unified payroll authority are supposed to be up and running within the next few months.

State assets

The absence of a list of all the state?s assets and properties is today a major thorn in the side of the state privatization fund (TAIPED), which is responsible for raising revenues through the sale or lease of some 70,000 state-owned real estate assets, without even having a list in its hands of what these are.

The absence of a list of private assets, meanwhile, is yet another major obstacle in the fight against tax evasion, as auditors are unable to find the owners of major holdings and charge them the respective property taxes.

The project to create a list of public and private assets (including luxury items such as expensive cars and yachts) began under former Finance Minister Alekos Papadopoulos, who served between 1994 and 1996, and was also financed by the Second Community Support Framework. The project, however, did not go to competition until 2000, nor was it included in the Third Community Support Framework.

?Greece?s public assets have not been fully recorded or assessed in terms of value. This kind of data has not been brought together so that we can say, ?We owe 240 billion euros, but we have assets of 200 billion euros,?? Tzortzakis said.


Computerizing hospitals is perhaps the area in which the most money was invested in order to modernize the state. The healthcare sector?s modernization began in the early 1990s with the computerization of just 15 hospitals the aim being to have 100 hospitals using digital records.

The process, however, is ongoing, as just seven of the 17 existing administrative departments of the regional health system program (PESYP) are currently computerized, while the computerization of the central healthcare administration, which began in 2005 and cost around 50 million euros, has yet to be completed.

Many hospitals administrators around the country, meanwhile, refused to meet the expense of holding competitions for computer systems they already had to be upgraded and maintained, saying that it would put a strain on their budgets. In effect, they opted against spending 100,000-200,000 euros on maintenance but were quite happy not to curb their already high expenditure on medicines and other operational costs, which in some cases reached up to a few dozen million euros a year.

Internet portals

There are plenty of question marks over how Greece used money from the Third Community Support Framework that was intended for the creation of Internet portals. In the 2000-2007 period, around 200 million euros was spent on creating hundreds of portals, which eventually operated as little more than websites, often with static content.

?Every municipality and every community group applied for money to create a website back then,? an adviser to a former minister at the time told Kathimerini on the condition of anonymity. He admits that it was a grave mistake that the process of assessing applications and issuing grants was not undertaken by a single authority, which should also have been responsible for commissioning the sites? development to one or more companies through a competition process.

The most ambitious of all the portal projects developed under CSFIII was the national portal dubbed Hermes, which was supposed to form a platform for communication between the country?s public administration and its citizens. The minister in charge at the time, Prokopis Pavlopoulos, had hailed Hermes as the bedrock of the Politeia program to reorganize the entire state structure. Hermes cost some 7.5 million euros and was completed in March 2009, with very dubious results. Evidence of its failure is that citizens continue to use Citizens? Service Centers (KEPs) rather than submitting requests online.


Plans for a unified electronic system monitoring the state?s supply networks were hatched back in 1999 under the Ministry of Commerce, which wanted to take advantage of CSFIII to curb spending and bring more transparency to the rather murky process of competitions for supply contracts. In 2002, the first pilot programs for applying the new system were put up for tender, ostensibly laying the groundwork for the system to go national within a few years.

Despite the pioneering nature of the proposal, it was not included for funding under CSFIII until the eve of the 2004 elections, after which the PASOK government was replaced by New Democracy. The new government promptly canceled the tender signed by the previous administration and relaunched its own competition in 2006. The competition did in fact take place that same summer, but a contractor was not named until summer 2009. Following the elections in October 2009 and PASOK?s return to power, the new administration refused to finalize the results of the competition, which eventually happened last summer, under pressure from Greece?s creditors.

The new contract was signed just before Christmas and the system is now expected to go into operation on January 1 next year.

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